International Business Machines — Earnings Quality Grade F
IBM · Technology
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 44 days, change +4 days YoY
AR growth 19.2% exceeds revenue growth 7.6%
Revenue 7.6%, CFFO -1.9%. Cash follows revenue
Expense Quality
Inventory -5.4% vs COGS 3.8%. Normal
CapEx growth 3.1% vs revenue 7.6%. Normal
SG&A/Gross Profit = 46.2%. Normal
Gross margin 58.2%, change +1.5pp. Stable
Cash Flow Quality
CFFO/NI = 1.25. Profits backed by cash
FCF $11.5B, FCF/NI = 1.08
Accruals ratio = -1.7%. Low accruals
Cash $14.4B covers only 22% of debt $64.6B
Balance Sheet Health
Goodwill+Intangibles $79.1B = 242% of equity. Over 50%
Debt/EBITDA = 3.7x. Healthy
Other assets 18.2% vs revenue 7.6%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change 11% YoY. Normal
Manipulation Score
M-Score = -2.40 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-10